Palm Runs Out Of Options as HTC Declines to Buy the Company

According to a report based on a source from an Asia-based Reuters correspondent, smartphone maker HTC has decided not to bid for Palm (PALM) after looking at the company’s numbers. The source, which reportedly has direct knowledge of the talks, said there “weren’t enough synergies to take the deal forward”.

That leaves Palm, which has been struggling to boost sales of its new range of smartphones, running out of options fast.

Bloomberg on April 12 reported that the Pre and Pixi maker had tapped Goldman Sachs and Frank Quattrone’s Qatalyst Partners to find a buyer. HTC was cited by a host of industry pundits as the bestfit.

If the Reuters report checks out, this means bad news for Palm, even if CEO and former Apple exec Jon Rubinstein has been telling press that the company could survive as an independent company in spite of disappointing sales of its flagship handsets. Rubinstein has also expressed interest in an alternative route to an outright acquisition, namely to start licencing other smartphone makers use of its webOS operating system in their devices.

We should note that Palm’s head of software and services has just quit the company to pursue a career at Twitter. More and more, Palm looks to be a sinking ship.

It makes the company’s new slogan for webOS all the more ironic: “Life moves fast. Don’t miss a thing.”

According to this morning’s Reuters report, the only major Asian bidder now left in the field expected to show an interest in the plagued smartphone and software maker is Lenovo, after HTC apparently declining to bid and Huawei dropping out of the bidding race earlier. Lenovo, the world’s number 4 PC brand, had more than $2.4 billion in net cash reserves at the end of 2009, according to its website.

Other potential buyers that have been cited by industry analysts in the past include Dell (NASDAQ:DELL), ZTE, HP (NYSE:HPQ), Acer and Nokia (NYSE:NOK).

Question is: if even the most likely buyer is not pleased with the numbers, who would be?